@joey_zozo That article reminds me of one other possibly related thing. XBox Kinects can be installed on a Windows PC. You don't need the fancy PC version, and a used Kinect is pretty cheap. There are supposed to be software libraries in .NET that are already built to use it, and the Kinect is supposed to be able to detect depth; not sure how. You could give that a whirl. Of course, then your wand would be dependent on the Kinect, which is obsolete.
@joey_zozo I've been meaning to toy with the kinect myself. I have a few in a bag from XBox 360's gone by...